How to prepare for a home loan

To prepare for a home loan, first decide on a good place to keep all the information, whether in a file folder, a box or on your computer. Just make sure you can access it once you are ready to start looking for a home.

Have a soft pull of your credit done to find out if there are any errors. Look it over to see if there are some things you can do to increase your scores.

Set aside money on a regular basis to have when you are ready to make an offer on a home.

Go through your home, attic and garage to sell items to help with the savings.

Make sure you are making all of your payments on time.

If you have student loans, request a detailed summary of your payments and balances.

Keep credit card balances to less than 50% of your limit.

Make sure your driver’s license has your current address and is not expired.

If you receive Social Security and/or pension, put the annual award letter and any other documents about them in the file you set up.

There are a number of loan programs that require a small percentage of the purchase price for the down payment, plus some without any requirements for a down payment at all. There will be transfer taxes, closing costs, attorney fees, etc. It is important to have funds available for the upfront, prior to closing fees. These are the earnest money deposit, appraisal, home inspection, and termite and water inspections. These fees will be an estimated $1,300. You can request the seller to help with your closing costs in the sales contract. Also, you can use gift funds from a family member.

Partner up with a trusted mortgage professional to ask questions, run a soft credit pull, and calculate different loan scenarios to help you be as prepared as possible once you are at the point of searching for homes and making offers.